Fred's Inc. Post Mixed Bag of First-Quarter Results
Lissa Wyman -- Furniture Today, August 2, 2013
MEMPHIS, TENN. - Sales came in flat, and comps retracted in the first quarter, but net income proved a highlight for Fred's Inc. during the regional chain's first quarter.
Fred's net income increased 9.1% to $11.4 million, from $10.5 million in the first quarter, which ended April 28. Earnings per diluted share grew 10.7% to 31 cents compared to 28 cents.
Total sales were essentially flat - up a modest 0.2% - to $501.5 million from $500.5 million for the same period last year. More challenged were comps, which declined 1.3% versus a decrease of 0.4% for the first quarter last year.
"We are very pleased with our first-quarter results, which topped the high end of our earnings guidance for the period," said Bruce A. Efird, ceo.
These improvements, he continued, "reflected the immediate impact of our recently launched reconfiguration plan, as we outperformed in gross margin results and expense management. Given the unusual weather conditions that affected top-line growth during the quarter, our team's ability to control expenses was one of the primary reasons we were at the high end of expectations."
Efird added "aggressive" plans are in place for 2013, including the "reconfiguration plan targeting pharmacy department growth, expanding our specialty drug program, and rolling out our expanded auto and hardware program."
Fred's is also continuing to update and refine its new prototypes and launch the test of the destination stores.
Earnings from operations for the quarter are expected to improve in the range of approximately 25% to 75% compared with the same period last year.
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